Tesla board is evaluating Elon Musk’s plan to take the company private

Members of Tesla Inc.’s board of directors confirmed Wednesday they are evaluating Elon Musk’s plan to take the electric car company private – a plan the mercurial founder, chief executive and chairman announced Tuesday in a tweet.

In a statement Wednesday, six board members – all of Tesla’s directors except Musk, his cousin Kimball Musk and Steve Jurvetson, who is on a leave of absence amid sexual harassment allegations at another firm – said Musk approached the board last week to discuss going private, a conversation that included how Musk might finance such a transaction.

“This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur,” directors said in Wednesday’s statement. “The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Musk not only said he might take the company private but also suggested a price for such a transaction: $420 a share – valuing the Palo Alto, Calif., automaker at more than $70 billion. Musk is the company’s largest shareholder, with a stake of about 20 percent, but he might have to come up with more than $50 billion to close a deal at that price.

Though it wasn’t initially clear whether Musk’s tweet was serious, Tesla shares jumped on the news, climbing 11 percent Tuesday to $379.57 – a price that suggests investors believe a deal at Musk’s tweeted price is possible but not a sure thing.

Going private could be advantageous for Tesla, which continues to burn through cash and has struggled to meet production goals for its Model 3 sedan. As a public company, Tesla’s books are public, giving investors – and Musk’s critics – a front-row seat to the company’s financial troubles.

If Musk takes the company private, those books would be closed.

The company burned through more than $1.5 billion in cash in the year’s first half and had $2.2 billion in cash remaining.

Musk said recently that Tesla’s cash flow will be enough to fund the company going forward and that he didn’t plan to raise new funds through stock or debt issues. But some analysts doubt Tesla’s ability to post significant growth without new outside capital.